Below is an excerpt, slightly modified, from the Wikipedia definition of PunchOut…
PunchOut is a protocol for used interactive sessions managed across the Internet, a communication from one application to another application, achieved through a dialog of real-time, synchronous cXML messages, which supports user interaction between remote sites…
The most common application of PunchOut is called “Procurement PunchOut”. In simple terms, “Procurement PunchOut” allows buying organizations to shop and place orders at e-commerce web stores (one application…) directly from their e-procurement system (…another application), securely over the web (…user interaction between remote sites.)
So why should B2B sellers (wholesale distributors, manufacturers, resellers, etc.) care?
The biggest users of e-procurement systems are Fortune 5000 companies.
Coupa, Ariba, SAP, Oracle, Jaggaer are among the more widely used e-procurement systems out there, but there are hundreds of others as well. According to The Hackett Group, e-procurement system usage will triple by the end of 2021.
So, if selling to Fortune 5000 companies is something you do, or plan to do, just having an online web store isn’t good enough – it must support Procurement PunchOut too.
Every e-procurement system (and most ERP systems) already have built-in PunchOut capability.
On the “buy-side”, Procurement PunchOut has existed for over 20 years. On the “sell-side”, national-level wholesale distributors (Grainger, Fastenal, etc.) have leveraged their large IT departments and financial resources – both of which many small wholesale distributors lack – to build and deploy highly functional, PunchOut-ready online stores, for almost as long.
This has no doubt created a competitive advantage for them. But things have changed…
The Cloud makes implementing a PunchOut-ready web store affordable for ANY B2B seller, regardless of size.
Unlike twenty, ten, or even five years ago, implementing an e-commerce web store will no longer “break the bank”; and thanks to PunchOut solutions vendors (yes, they exist, and in full disclosure, this blog is sponsored by one), neither will adding PunchOut capability to your online store. So, having no IT department, and a small e-commerce budget is no longer an excuse for small and medium distributors not to up their game!
PunchOut just works!
Still not convinced you need PunchOut? Here’s a story for you. Amazon Business added PunchOut capability their site in late 2015. By the end of 2018, their sales increased by more than 10X, from under $1B to over $10B (we will do a dedicated post on this soon.)
PunchOut worked for Amazon, it can work for you too.
If your Fortune 5000 customer isn’t asking you for PunchOut, be worried
Large national wholesale distributors, marketplace operators, and Amazon Business – especially Amazon Business – are more than happy to expand their product lines to help Fortune 5000 customers buy online using their e-procurement systems. If this happens, will this customer still need you?
The bottom line is if you already have, or are planning to have an online web store (Magento, Shopify, Woo Commerce, Big Commerce, Oro Commerce, Opencart, Episerver are some vendor examples), and also have Fortune 5000 customers, be proactive and get your store PunchOut-capable immediately.